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21. China, Europe, and the Pandemic Recession: Beijing’s Investments and Transatlantic Security

Author:
John R. Deni, Chris Alden, Erik Brattberg, Roger Cliff, Mark Duckenfield, R. Evan Ellis, Nicholas Nelson, and Laura Speranza
Publication Date:
05-2022
Content Type:
Special Report
Institution:
The Strategic Studies Institute of the U.S. Army War College
Abstract:
Given the depth and breadth of the pandemic-induced recession in Europe, private companies in need of capital and governments looking to shed state-owned enterprises may be tempted to sell shares, assets, or outright ownership to investors with liquidity to spare. Of greatest concern is the role that China might play in Europe, building Beijing’s soft power, weakening allied geopolitical solidarity, and potentially reprising the role it played in the 2010s, when its investments in Europe expanded dramatically. More specifically, there is concern over China’s investments in infrastructure and sensitive technologies relevant to American and allied military operations and capabilities. Whether Europe is prepared and able to parry Beijing’s economic statecraft is somewhat unclear, given varied attitudes toward China and the patchwork of investment screening mechanisms across the continent. Regardless, the outcomes will have significant implications for US security and for the Defense Department specifically. In support of US European Command (EUCOM) and the Department of Homeland Security (DHS), the U.S. Army War College’s Strategic Studies Institute (SSI) assembled an interdisciplinary team to examine these issues and offer actionable policy recommendations for military leaders and decisionmakers on both sides of the Atlantic.
Topic:
Security, Military Affairs, Economy, Investment, Transatlantic Relations, COVID-19, State-Owned Enterprises, and Recession
Political Geography:
China, Europe, Asia, and United States of America

22. The evolving contribution of R&D, advertising and capital expenditures for US-listed firms’ growth in sales, 1979-2018: A quantile regression analysis

Author:
Joel Rabinovich
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
City Political Economy Research Centre (CITYPERC), University of London
Abstract:
This article presents new insights on the evolving contribution of different types of investments to the growth in sales of US nonfinancial listed firms during the 1979-2018 period. By means of quantile regressions it is observed an increasing contribution over time of intangible investment vis-à-vis a decline in capital expenditure both for high-growth and slow-growth firms. However, the impact of different types of intangible investment differs depending on the kind of firm. Whereas research and development (R&D) has a positive contribution for high-growth firms, only advertising has a positive effect for their slow-growth peers.
Topic:
History, Investment, Research and Development, Firm Growth, Quantile Regression, and Intangibles
Political Geography:
North America and United States of America

23. A Proverbial Shot in the Arm: US Investment Is Key to Boost Philippine Economic Recovery and Resilience

Author:
Ser Percival K. Peña-Reyes
Publication Date:
06-2022
Content Type:
Special Report
Institution:
East-West Center
Abstract:
Dr. Ser Percival K. Peña-Reyes, Director of the Ateneo Center for Economic Research and Development explains that "despite all the challenges faced by the Philippines, the United States continues to be a huge source of fresh equity capital (one of three components of FDI). Among 123 equity capital sources, the United States is the second largest..."
Topic:
Foreign Policy, Investment, Resilience, COVID-19, and Economic Recovery
Political Geography:
Philippines, Asia-Pacific, and United States of America

24. How difficult is China’s business environment for European and American companies?

Author:
Uri Dadush and Pauline Weil
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
Despite tensions over China’s discriminatory business practices, China’s trade continues to thrive, and the country has taken over from the United States as the first destination for foreign investment. American and European businesses continue to be engaged in China’s large and growing market, even amid a trade war between China and the United States. Drawing on surveys of companies and international comparisons, we show that – contrary to the prevailing narrative – China’s business practices have improved significantly in recent years. China’s business environment is today generally more favourable than that in other large countries at similar levels of development and, in some though certainly not all aspects, is in line with the Organisation for Economic Co-operation and Development average. Differences over geopolitics and human rights must be addressed, but it is clear that trade and investment agreements conditioned on accelerated reforms in China would yield substantial dividends. The benefits of such deals would accrue not only to foreign investors in China and exporters to China, but also to consumers and importers in the European Union and, especially, in the US, where punitive tariffs on China remain in effect. Critical aspects in the negotiations would include better access for American and European investors to China’s market for services and improved enforcement of rules and regulations in China. As in many middle-income countries, uneven enforcement of the law (rather than the law itself) remains a critical problem in China.
Topic:
Development, Bilateral Relations, European Union, Business, and Investment
Political Geography:
China, Europe, Asia, North America, and United States of America

25. Reviving and Reorienting Growth after the Pandemic: The Role of Local Infrastructure Investments

Author:
Nicola Bilotta
Publication Date:
12-2021
Content Type:
Special Report
Institution:
Istituto Affari Internazionali
Abstract:
The last decade has witnessed a progressive change in what had long been considered global priorities for achieving growth. The global financial crisis of 2007–2008 and the following European sovereign debt crises of 2011–2012 have brought to light important pitfalls in the functioning of globalized financial markets. Trade and financial liberalization policies have at times caused severe strains in some communities, raising concerns over the effects of rapid increases in international integration. Environmental and social risks have come to the forefront of the policy debate. The COVID-19 pandemic has brought enormous challenges to what was the normal way of living. All these events have had far-reaching consequences on the global economy. Currently, the world is facing at least three major shocks that are affecting health (COVID-19), prosperity (the recession) and the planet (climate change). These have been chosen as the three keywords for Italy’s G20 Presidency. These shocks are different in nature and have very diverse effects across countries, regions and municipalities. This calls for differentiated and targeted responses that take into account the specific needs of individual communities.
Topic:
Climate Change, Infrastructure, G20, Economic Growth, Investment, Integration, and COVID-19
Political Geography:
Europe, India, Vietnam, Philippines, United States of America, and Congo

26. Investing in Jordan Through Support for Social Enterprises

Author:
Lilian Tauber
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
The Washington Institute for Near East Policy
Abstract:
By committing to long-term investments in Jordan’s communities through support for social enterprises, the United States can contribute to the country’s stability and economic growth. In Jordan, one of the United States’ most reliable allies in the Middle East, economic volatility is a major threat to stability and has led to recurrent protests since 2011. High youth unemployment rates and a large refugee population contribute to its economic woes and political tensions, all of which are now exacerbated in the Covid-19 pandemic. The United States can support Jordan’s recovery from the pandemic through long-term investment in social entrepreneurship. The country’s entrepreneurship ecosystem is in a developing stage, with most resources focused on short-term funding and training, so a shift in U.S. aid to longer-term support can make a significant difference. Increasing funds and providing multi-year mentorship and operational support to select social enterprises (SEs) will allow them to become powerful forces for positive change and civic engagement in their communities.
Topic:
Development, Foreign Aid, Economy, and Investment
Political Geography:
Middle East, Jordan, and United States of America

27. US, Japan, and South Korea Coordination Key to Competing in Southeast Asia

Author:
Karl Friedhoff and Lea Chang
Publication Date:
06-2021
Content Type:
Special Report
Institution:
Chicago Council on Global Affairs
Abstract:
In picking fronts that offer the paths of least resistance, trilateral cooperation will maximize the presence of all three countries in ASEAN, maintaining balance in the region and making collective progress toward economic and development goals. Despite its size, economic dynamism, and geographic position, Southeast Asia has received comparatively little attention in US foreign policy. Even as American policy becomes more focused on China, the United States lacks a coordinated strategy to respond to and compete with China’s vast trade and investment in Southeast Asia. But most ASEAN countries are wary of China’s growing influence and would be open to US involvement as they look to diversify. To take advantage of this opportunity, the United States must supplement its focus on the South China Sea with diplomatic and financial efforts on land. These efforts should offer an alternative to China’s largesse but should not seek a direct competition in hard infrastructure or in terms of dollar amounts invested. Nor should the United States go it alone. Instead, it should seek to cooperate with its allies—Japan and South Korea in particular—to pursue their respective competitive advantages. These include identifying and investing in small- and medium-sized enterprises in ASEAN, developing human capital in the region, and conducting joint maritime cleanup activities in coordination with ASEAN countries. Creating coordinated activities with Japan and South Korea in Southeast Asia should be the first step for the United States to roll back China’s influence in the region. But these efforts will need to be calibrated to ensure that they focus on the needs of countries in the region and not just engulf the region in the US-China competition.
Topic:
Security, Foreign Policy, Defense Policy, Infrastructure, Investment, and Trade
Political Geography:
Japan, China, Asia, North America, Southeast Asia, and United States of America

28. Decade of patience: How China became a power in the Western Balkans

Author:
Vladimir Shopov
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
European Council on Foreign Relations (ECFR)
Abstract:
China has become the most prominent third actor in the Western Balkans. The country’s activities are spread unevenly across the region, but they follow a common approach. This approach is marked by China’s wide-ranging efforts to establish itself in key economic areas and to gradually position itself as an indispensable actor. China is slowly transforming its interactions with Western Balkans countries in sectors such as culture, media, and politics into long-term and institutionalised relationships. As European and US ambivalence towards the Western Balkans persists, the region will be in increasing danger of falling into an endless spiral of competition between various foreign actors. Western policymakers should address the widening developmental gap between the region and the EU through initiatives such as targeted investment plans in energy and infrastructure, sectoral integration frameworks, and the frontloading of EU law in the accession process.
Topic:
Foreign Policy, Infrastructure, European Union, and Investment
Political Geography:
China, Europe, Eastern Europe, Balkans, and United States of America

29. Labs over Fabs: How the U.S. Should Invest in the Future of Semiconductors

Author:
Chris Miller, Jordan Schneider, and Danny Crichton
Publication Date:
03-2021
Content Type:
Special Report
Institution:
Foreign Policy Research Institute (FPRI)
Abstract:
The U.S. semiconductor industry faces an existential competitive threat. China’s efforts to catch up and eventually overtake the U.S. in semiconductor technology is not only an economic challenge—it is also a security threat. The Trump administration’s decision to pressure Huawei by cutting off its access to critical semiconductor technologies has only intensified China’s commitment to developing its own ability to design and manufacture computer chips without reliance on foreigners. China has spent billions of dollars in state subsidies, and plans to spend billions more in the coming years. At risk is not just the U.S. industrial base, but also the complex supply chains that link U.S. firms to customers and suppliers in South Korea, Taiwan, Japan, and several European countries. On February 24, 2021, President Biden ordered a 100-day review aimed at “securing America’s critical supply chains.” The executive order focused on the semiconductor industry, declaring that “over the years we have underinvested in production—hurting our innovative edge—while other countries have learned from our example and increased their investments in the industry.” While production certainly has its place, it would be dangerous for the U.S. to focus solely on the fabrication of semiconductors at the expense of other parts of the chip production process—including design, software, and production machinery—where the U.S. is currently stronger. There is a case to be made for supporting the construction of manufacturing facilities (“fabs”) for certain types of specialized chips, such as those needed in the defense sector. But reshoring most or all production is not a realistic goal. Moreover, the tens of billions of dollars that such a policy would cost are better spent elsewhere. Beyond that, the U.S. should focus less on supporting production of today’s technologies, which given the pace of innovation will soon be out of date. Instead, scarce resources should be devoted to shoring up the broader semiconductor ecosystem on which American innovation depends. In the past, the government has played a major role in investing in research that is not yet commercially viable, something it should be doing more of today. It should build talent pipelines from high schools to universities to corporations and startups, ensuring an ample supply of semiconductor engineers. And the U.S. should see open-source chip architectures such as RISC-V not as a threat to existing intellectual property, but as a technology that could unlock a new wave of semiconductor innovation—something that the U.S. would be well placed to lead.
Topic:
Science and Technology, Investment, and Semiconductors
Political Geography:
North America and United States of America

30. How China Regards its Future in the World

Author:
Marcos Caramuru and Philip Yang
Publication Date:
04-2021
Content Type:
Special Report
Institution:
Brazilian Center for International Relations (CEBRI)
Abstract:
China’s post-Covid plans regarding national investment and foreign policy are ambitious and its success depends on the ability to build trustworthy relations with its Asian neighbors and the great powers. The XXII China Analysis Group meeting gathered experts to discuss China’s positioning and the ways in which it could overcome challenges and aim for a positive bilateral agenda with the USA during the Biden administration.
Topic:
International Relations, Foreign Policy, Bilateral Relations, Investment, and COVID-19
Political Geography:
China, Asia, and United States of America